According to a report from the Global Trade Research Initiative (GTRI), it is recommended that the government refrains from reducing import duties on electronic components utilised in smartphone manufacturing in the upcoming Budget. The GTRI emphasised that the existing tariff structure has proven successful, and any alterations could negatively impact local manufacturing in India's growing smartphone market. The think tank suggested that maintaining the current import tariffs, ranging from 7.5 to 10% on imported smartphone parts, is essential for balancing industry growth and ensuring long-term development. The GTRI argued that these tariffs support duty-free imports for manufacturing products intended for export, promoting industry sustainability. In contrast to this perspective, the India Cellular and Electronics Association (ICEA) has advocated for import duty cuts, asserting that such measures could significantly boost domestic production, exports, and indigenous manufacturing.

The GTRI also proposed that while Indian manufacturers should pay duties on smartphones sold domestically, exports should be exempted from such duties. The report highlighted existing mechanisms, such as Advance Authorisation, Export Promotion Capital Goods, and operations in Special Economic Zones (SEZs) that facilitate duty-free imports for manufacturing and exporting electronic items. Additionally, the customs bond scheme allows firms to benefit from duty-free imports without localisation requirements.

The report noted the success of India's smartphone industry under the Production Linked Incentive (PLI) scheme, with exports increasing from $7.2 billion in 2022 to $13.9 billion in 2023. The PLI incentives, offering a 4-6% cash incentive on annual incremental production and maintaining different tariffs for smartphones and their components, have contributed to this success. However, the GTRI cautioned against reducing import duties, as it could lead to the emergence of superficial assembly plants relying on imported parts, which may not contribute significantly to the local economy. The GTRI argued that maintaining import tariffs is crucial for fostering sustainable economic growth and preventing short-term assembly operations from overshadowing long-term, valuable manufacturing efforts in India's smartphone industry.